By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Department of Inland Revenue’s top official yesterday said she was “very surprised” that some liquor operators are backing reforms to “rein in” an industry that is “running wild”.

Shunda Strachan, the tax agency’s controller, told a Zoom conference on the new liquor licensing/registration process that an “all hands on deck” approach involving the Bahamian public is vital to preventing the likes of bars, restaurants and nightclubs “popping up all over the place” in residential areas and over-saturating communities.

She reiterated that operators of so-called “cages”, where alcohol is sold from a window, take-away restaurants and other existing liquor entities for which licences will no longer be issued have until April 1, 2026, to reconfigure their businesses and come into compliance with Business Licence Act reforms passed alongside the May Budget.

And the Department of Inland Revenue chief also warned that it will use the new liquor licensing process to request that other government agencies “start afresh” and “clean up whatever needs to be cleaned up” under their regulatory purview.

Ms Strachan warned that, in particular, this will target companies who have either expanded or changed their business purpose/nature without it being reflected in their annual Business Licence renewals. Without naming the entity, she cited an operation that started out as a sit-down restaurant but subsequently has become “a full-fledged dancehall” generating noise and parking obstructions.

Acknowledging that operators of “cages” will likely be most impacted by the new regime, and that some may not survive, the Department of Inland Revenue chief said that while some in the liquor industry have voiced concerns about the new regime there has also been support from unexpected sources.

Without naming who she was referring to, Ms Strachan said: “I was actually very surprised, if I can say that. There was one in particular, a very known and a very strong leader in the liquor industry, who came out and supported the legislation and said that back in the day there were rules in place and in force which worked.

“In his statement, he made clear it’s needed and because it seems the industry is just running wild there definitely needs to be some sort of restrictions put in place to get it back in line.” In unveiling the Business Licence Act reforms and new regulatory regime, the Davis administration made clear it is designed to curb the spread of alcohol-selling entities in residential and inner-city areas.

This is also intended to counter the social ills associated with alcohol consumption, including under-age drinking. Ms Strachan yesterday explained that food trucks will not be permitted to serve alcohol because their mobile nature makes them difficult to police.

“That’s the decision the Government made relative to how it plans to regulate liquor entities,” she added. “When you think about a food truck, a food truck moves around, so that really goes against what they’re [the Government] trying to accomplish now; they’re trying to bring some order to what is felt to be a dis-ordered industry right now, the liquor industry.

“For a liquor entity to be mobile and moving around, that takes away the ability to safely control your environment when dealing with liquor establishments. So it’s all about safety and just trying to rein what is seen as a proliferation of liquor establishments popping up all over the place.”

However, the guidance notes released by the Department of Inland Revenue state that party buses and mobile bars will be permitted subject to certain conditions. In the former’s case, the vehicle “must be certified for a bar licence or restaurant and bar licence” and not sell alcohol while it is moving. As for mobile bars, only those with a permanent place of business will be certified.

Revealing that the new liquor licensing process will be exploited to “clean up” in other areas, Ms Strachan added: “What we tend to see sometimes is that entities get a Business Licence for one aspect of business and, over time and over the years, they expand and change the nature of their business without coming back to us or going back to the regulators and getting the proper inspections.

“I know of one entity that started as a restaurant, a sit-down restaurant, but over time became a full-fledged dance hall. The noise that comes from that establishment is causing challenges in the community in which it resides. The question is: Is it a residential community? Was it there first?

“The condo unit complex which sits near that particular establishment, the complaints that come from there because of the loud noise or the infringement of traffic where you cannot get to your home.... We’re going to ask our sister agencies to re-check all their regulations; they’ll go down their check-lists again,” Ms Strachan continued.

“Some of these businesses have had a Business Licence for many years, and over many years have changed the nature of their operations. Some of these changes may not have been properly regulated or allowed. It’s like starting anew. We’re starting afresh to clean up whatever needs to be cleaned up.”

Ms Strachan also voiced optimism that the reforms will help to combat the ‘grey market’ for counterfeit, smuggled or tax-dodging liquor sales which Commonwealth Brewery, in 2012, estimated accounted for up to 15 percent of the Bahamian alcohol market.

“I think that’s happening now,” she said of ‘grey market’ sales. “There’s a strong black market that’s going on now where we have sales happening where goods are coming in, un-customised goods, meaning they come in without the requisite duty being paid.....

“We have some black market things happening now, and that’s a reason for trying to bring structure and bring regulation to the liquor industry. There are lots of things happening that we are aware of, and this is going to help bring some of it - not all, but some of it - into line. This will help the black market and underground.”

While alcohol sales on board cruise ships will be exempt from the new liquor licensing regime, including when they are docked in ports such as Nassau and Freeport, the new regulations will apply on their private islands.

Ms Strachan, asserting that operators of “cages” and other formats that will be banned under the new regime have time to adjust their business models and come into compliance, said: “An opportunity has been given. Initially we were going with the premise that we will start enforcement from December 31 when licences expire.

“But the Business Licence has a three-month grace period. While the licence expires on December 31, three months is given as a grace period to the end of March when payment is due, so we will allow businesses until April 1 to prepare and get their premises suited and fitted. So enforcement will not commence until April 1”, 2026.

Acknowledging that “cage” operators and other liquor entities have raised concerns about the new regime including safety, Ms Strachan asserted there is a “flip side” to the latter argument because the Royal Bahamas Police Force “have said there has been an uptick in crime and unsavoury behaviour” at certain “cage” sites due to persons “congregating and getting into fights and that type of thing”.

While doubts have been raised about whether the Department of Inland Revenue has sufficient manpower and resources to effectively enforce, and police, the new liquor licensing regime, Ms Strachan said the tax authority will not be doing this in isolation. Besides its own investigation and compliance unit, it will also get help from the likes of the police and is also seeking the general public’s help.

“This is a very huge task which has been assigned to the Department of Inland Revenue,” she admitted. “We need your help; you, the general public. This is not a DIR law or policy. It’s the Government’s policy, our country’s policy, and it is a priority or really a challenge for us to clean up our liquor industry. We are going to need all hands on deck to do it.

“It cannot be done by the Department of Inland Revenue alone. We’re going to need your assistance. It’s legislation passed by the Government, so it’s all of our concern. It’s for all of us to police, because it’s been entrusted to us to manage and we’re going to manage it very well, but we’re going to call on all of you for assistance.”